This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.

Divergence and Once a Decade Move


President of Blue Line Futures

E-mini S&P (March) / NQ (March)

S&P, yesterday’s close: Settled at 3779.25, up 35.00

NQ, yesterday’s close: Settled at 13,186, up 80.50

Fundamentals: U.S. benchmarks could not hold their rebound yesterday and were slammed into the close. This leaves a very uncertain and vulnerable landscape ahead of the weekend. In part, the violent swings from elevated levels are simply not conducive to higher prices. While GameStop, AMC, and hedge fund blowups have stolen the headlines, we must not forget that Washington delayed fiscal policy until mid-March at best. Furthermore, in a time of unprecedented stimulus measures, an upbeat prognosis by the Federal Reserve, despite the “long path to recovery ahead”, arguably left the market desiring more. This is fine with us; we have been Bullish in Bias through the best parts of the rally and raised caution by standing Neutral this week. Therefore, we welcome lower prices in order to go shopping.

Core PCE, the Federal Reserve’s preferred inflation gauge, is due this morning at 7:30 am CT. Expectations are for a dip from 1.4% YoY in November to 1.3% YoY in December. We have said here many times, inflation is showing up in parts of the economy that PCE certainly does not see and we believe CPI will soon respond to. This data point is accompanied by Personal Spending, Income, and Consumption. At 9:00 am CT, we look to final January Michigan Consumer data.

Technicals: Yesterday’s failure to hold gains out above the 3790 mark in the S&P after such a sturdy rebound exudes how vulnerable this market is. For the NQ, it could not break through major three-star resistance at 13,350-13,389 and likewise slipped into the close. In the aftermath, yesterday’s settlements align with previous levels to create major three-star resistance overhead in the S&P at 3779.25-3782.75 and in the NQ at 13,159-13,186; at a bare minimum, the bulls must achieve a close above here, such would paint a smoother picture to recovery to start next week. Our momentum indicator in the S&P aligns with our previous level 3758-3762.25 and this will be our Pivot today; continued action below here will begin to paint a path of least resistance lower. Furthermore, a close below … Sign up for a Free Trial at Blue Line Futures to have our entire fundamental and technical outlook, actionable bias, and proprietary levels for the markets you trade emailed each morning.  

Crude Oil (March)

Yesterday’s close: Settled at 52.34, down 0.51

Fundamentals: Commodity prices for the most part have staved off equity market weakness. Crude Oil continues to hold ground in the middle part of its recent range, finding tailwinds from the large surprise U.S. draw on Wednesday and overnight news that stockpiles in China have also drawn down sharply. Ultimately, we are seeing an equation in China like that of the U.S.; an uptick in Refinery Utilization increasing the call for Crude. Between, China and India in Asia, and better than expected GDP data out of Germany this morning, there are certainly reasons to justify why Crude Oil is holding ground. However, if equities make the next leg lower, it is likely we see a break below major three-star support.

Technicals: Crude Oil traded to a low of 51.93 overnight and the bulls continue to defend major three-star support at 51.40-51.51. As we have noted many times go back through last week; we must see a break below this support or out above major three-star resistance at … Sign up for a Free Trial at Blue Line Futures to have our entire fundamental and technical outlook, actionable bias, and proprietary levels for the markets you trade emailed each morning.  

Gold (April) / Silver (March)

Gold, yesterday’s close: Settled at 1841.2, down 7.7

Silver, yesterday’s close: Settled at 25.922, up 0.533

Fundamentals: For one second, forget the headlines: Gold and Silver are higher with the equity market lower, THEY ARE ACTING LIKE SAFE HAVENS! We have been waiting for this divergence for nearly a year when the metals complex got crushed due to deflationary fears at the onset of the pandemic and Saudi Arabia’s production decision. Now, we of course cannot ignore the headlines and we could be witnessing the start of the most coordinated short squeeze ever seen in commodities. The WallStreetBets Reddit forum, famed for GameStop, AMC and pushing hedge funds into liquidation, is now targeting Silver through ETF options. We do not like using ETFs because it is a derivative of a derivative and you are losing value relative to using futures on the CME (the underlying of the ETF). However, when SLV rises, the ETF manager must correlate buying in the futures market. If there is a squeeze in SLV, especially through options there is room for this market to rip higher. Furthermore, if people catch onto the futures options we use, and create large Open Interest in Call Options that then moves ‘In the Money’, this would create a generational short squeeze. Silver futures are physically deliverable and there could be more options in the money than could cover what is available for physical delivery; the only remedy would be higher prices.

Technicals: We remain outright Bullish in Bias as Gold and Silver are roar higher. First, Silver failed at major three-star resistance yesterday at 27.00-27.28 and has now cleared that level; continued action out above here ultimately paints a path of least resistance to 30.00. This round $30 mark will likely be pivotal due to the … Sign up for a Free Trial at Blue Line Futures to have our entire fundamental and technical outlook, actionable bias, and proprietary levels for the markets you trade emailed each morning.

Originally Posted on January 29, 2021 – Divergence and Once a Decade Move

Disclosure: Blue Line Futures

Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results. The information contained within is not to be construed as a recommendation of any investment product or service.

Disclosure: Interactive Brokers

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Blue Line Futures and is being posted with permission from Blue Line Futures. The views expressed in this material are solely those of the author and/or Blue Line Futures and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

In accordance with EU regulation: The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research.

Any trading symbols displayed are for illustrative purposes only and are not intended to portray recommendations.

Disclosure: Margin Trading

Trading on margin is only for sophisticated investors with high risk tolerance. You may lose more than your initial investment.

For additional information regarding margin loan rates, see

Disclosure: Options Trading

Options involve risk and are not suitable for all investors. For more information read the Characteristics and Risks of Standardized Options, also known as the options disclosure document (ODD). To receive a copy of the ODD call 312-542-6901 or copy and paste this link into your browser:

Disclosure: Futures Trading

Futures are not suitable for all investors. The amount you may lose may be greater than your initial investment. Before trading futures, please read the CFTC Risk Disclosure. A copy and additional information are available at

trading top